U.S. Dollar Index (DX) Futures Technical Analysis – Bulls Still Respecting Uptrend, 90.340 Pivot

The greenback has been helped since the start of the new year by rising U.S. Treasury yields and some investor caution about the strength of the global economic recovery from the coronavirus pandemic. However, the short-term move hasn’t been strong enough to sway longer-term traders from changing their bearish outlook.

At 07:00 GMT, March U.S. Dollar Index futures are trading 90.335, down 0.141 or -0.16%.

In other news, Yellen, appearing before the Senate Finance Committee on Tuesday, urged lawmakers to “act big” on the next coronavirus relief package, adding that the benefits outweigh the costs of a higher debt burden.

Yellen also said the dollar’s value should be determined by market forces, adding that the United States should oppose attempts by other countries to artificially manipulate currency values to gain trade advantage.

Daily Swing Chart Technical Analysis

The main trend ticked higher on the daily chart last Friday when buyers took out 90.720. However, the lack of follow-through to the upside following the surge to 90.790 suggests the move may have been fueled by short-covering and buy stops rather than new buyers. A trade through 89.890 will change the main trend to down.

The main range is 92.730 to 89.165. Its retracement zone at 90.950 to 91.370 is new resistance.

The minor range is 89.890 to 90.790. The index is currently straddling its 50% level at 90.340.

The short-term range is 89.165 to 90.790. Its 50% level at 89.980 is the last potential support before the 89.890 main bottom.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the March U.S. Dollar Index on Wednesday will be determined by trader reaction to the pivot at 90.340.

Bearish Scenario

A sustained move under 90.340 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into 89.980 and 89.890. The latter is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over 90.340 will signal the presence of buyers. If this move can attract enough buyers then look for the rally to possibly extend into 90.790, followed by a resistance cluster at 90.950.